Quite often the first thing that comes to an entrepreneurs mind when they think about debt collection is an enforcement officer, law firm and time-consuming, expensive court proceedings. While in fact it is worth visiting the debt collection agency first. Why?
Before we bear the costs of court proceedings, we should check how much we can negotiate. This is where the debt collection agency may help. In comparison, law firms offer a quite limited scope of services.
For example, while the law firm sends a formal summons to the debtor and then files a motion for a payment order in court, the representative of a debt collection agency can call the debtor several times, send an e-mail, and, if the debtor does not respond, visit them in their office. In this way the whole case will be settled in an amicable, cheaper way.
The debt recovery market has developed dynamically in recent years. Debt collection agencies often provide comprehensive liquidity management services. During the period of waiting for recovery they may grant the customer an advance payment or a short-term loan to finance ongoing operations. Finally, they may just purchase the whole debt so that it will become only their problem.
It is worth remembering, because we need to act quickly when debt emerges. Unfortunately, traditional ways of acting are everything but fast.
Actions taken within the first two-three months from the elapsed payment date are the most effective. In situations when it is enough to “remind” the debtor about the outstanding payment and most disputes can be settled amicably, submitting the case to the court prematurely may also unnecessarily ruin the relationship between partners.
If it is necessary, the case will be finally settled in court anyway, because the only thing that counts in the end is to recover the money due.
Published on: 9 November 2016